A firm purchases a factor of production in a competitive market. At the current purchase rate the MRP of the factor is greater than the marginal expenditure for the factor. Thus, the firm
A) can increase profit by reducing the employment of the factor of production.
B) is now maximizing profit.
C) should not use this factor of production because it has no potential in generating a profit.
D) can increase profit by expanding the employment of the factor of production.
D
You might also like to view...
Suppose ordinarily half your class would get an A and half would get a B, with A students having a 25% chance of getting an A and B students having a 25% of getting an A. It costs $100 to persuade the instructor to raise a B grade to an A. A student is willing to pay $40 to insure she will get her usual grade and $70 to insure she will get a higher grade than usual. a. If all students buy insurance that guarantees them an A, what is the zero profit price for an insurance company that offers A insurance. b. Will grade insurance be sold in equilibrium? c. Who would buy insurance and at what price if the insurance companies could tell what type of student each student is? d. Is either the result in (b) or (c) efficient?
What will be an ideal response?
The (age) dependency ratio is the
a. ratio of children to the total population b. ratio of people not of working age to the total population c. ratio of infants to the total population d. ratio of the elderly to the total population e. none of the above
All of the following are intangible except: a. health
b. love. c. computer programming expertise. d. All of the above are intangible goods.
Countercyclical policy was relatively uncomplicated for Keynesian economists. It simply required that
a. during recession, government runs budget surpluses and the Fed expands the money supply, while during prosperity, government runs budget deficits and the Fedcontracts the money supply b. during recession, government runs budget surpluses and the Fed contracts the money supply, while during prosperity, government runs budget deficits and the Fedexpands the money supply. c. during recession, government runs budget deficits and the Fed expands the money supply, while during prosperity, government runs budget surpluses and the Fedcontracts the money supply. d. during recession, government runs budget deficits and the Fed contracts the money supply, while during prosperity, government runs budget surpluses and the Fedexpands the money supply. e. during recession, government runs budget deficits and during prosperity, government runs budget surpluses. The Fed should not get involved with expanding orcontracting the money supply according to Keynesians.